Negative loan growth is a very important issue since many believe only when the “banks start lending again” will the U.S. economy recover. Each week, the Federal Reserve releases its H.8 report detailing the assets and liabilities for the U.S. commercial banks. Although the weekly change in total loans may swing positive or negative, this report (excluding the impact of an accounting change in March 2010)…
Insights: United States
U.S. Banks Buck a Powerful Q4 Trend (And Why it’s Bullish)
The U.S. banks reported a very solid, albeit messy, fourth quarter, completing the first year of what we expect to be a three year recovery. Of interest, this quarter saw the banks buck a very powerful historical trend in credit, as credit losses (or net charge-offs, NCOs) declined in Q4 versus Q3. This bodes very well for not only the durability of the credit recovery, but…
Expected Dividend Increases = More Evidence of Belief in Recovery
In January, the “stress test” banks (i.e., those 19 institutions stress-tested under the U.S.’s Supervisory Capital Assessment Program in 2009) submitted capital plans to the Federal Reserve, many of which (JPM, WFC, PNC) are expected to have included requests to raise their dividends. For these banks, dividend increases (and buybacks of any size) have been on hold until the Federal Reserve gives its blessing, while some…
U.S. Banking: A wounded giant on the mend (Globe and Mail)
Like the U.S. itself, the banking sector south of the border is a wounded giant, battered and bruised from a historic financial crisis and deep recession. With approximately 8,000 deposit-taking institutions (for simplicity, referred to here as just “banks”), and $7.5-trillion (U.S.) in loans, the system’s return to health is crucial to a durable recovery in the U.S. economy.